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New York's Gray Lady:

Times Editors and Staff May See New Era of Cloak and Dagger

by Jim Kouri, CPP:

a pocket stuffed with a wad of bills, free poker games in Vegas, a wallet suddenly flush with cash. There were bogus cover stories for trips to the “motherland” where secrets were passed and clandestine couriers who helped deliver materials into foreign hands. 

If it all sounds very cloak and dagger, that’s because it is. Two recent cases worked by the FBI and its partners—and brought to fruition with four arrests on opposite coasts had all the intrigue of a good spy novel—according to reports obtained by the National Association of Chiefs of Police’s National Security Committee. 

In the first case, a former Boeing engineer was arrested after being indicted on charges of economic espionage and acting as an unregistered foreign agent of the People’s Republic of China (PRC), for whom the engineer stole Boeing trade secrets related to several aerospace programs, including the Space Shuttle.

Dongfan “Greg” Chung, 72, of Orange, California, who was employed by Rockwell International from 1973 until its defense and space unit was acquired by Boeing in 1996, was arrested without incident at his residence by special agents with the Federal Bureau of Investigation and investigators with NASA. Chung, who is expected to make his initial court appearance here this afternoon, was named in an indictment returned last Wednesday by a federal grand jury.

The indictment accuses Chung of eight counts of economic espionage, one count of conspiracy to commit economic espionage, one count of acting as an unregistered foreign agent without prior notification to the Attorney General, one count of obstruction of justice, and three counts of making false statements to FBI investigators.

Chung, a native of China who is a naturalized United States citizen, held a Secret security clearance when he worked at Rockwell and Boeing on the Space Shuttle program. He retired from the company in 2002, but the next year he returned to Boeing as a contractor, a position he held until September 2006. The indictment alleges that he took and concealed Boeing trade secrets relating to the Space Shuttle, the C-17 military transport aircraft and the Delta IV rocket. Chung allegedly obtained the materials for the benefit of the PRC.

United States Attorney Thomas P. O’Brien stated in a press release, “Mr. Chung is accused of stealing restricted technology that had been developed over many years by engineers who were sworn to protect their work product because it represented trade secrets. Disclosure of this information to outside entities like the PRC would compromise our national security.”

The case against Chung is related to an investigation into another engineer who worked in the United States and obtained sensitive military information for the PRC. The man, Chi Mak, and several of his family members were convicted last year of providing defense articles to the PRC.

In various letters to his handlers in the PRC, Chung referenced engineering manuals he had collected and sent to the PRC, including 24 manuals relating to the B-1 Bomber that Rockwell had prohibited from disclosure outside of the company. According to the indictment, between 1985 and 2003, Chung made multiple trips to the PRC to deliver lectures on technology involving the Space Shuttle and other programs, and during those trips he met with officials and agents of the PRC government.

The indictment alleges that Chung and PRC officials exchanged letters that discussed cover stories for Chung’s travel to China and recommended methods for passing information, including suggestions that Chung use Chi Mak to transmit information.

The indictment describes a May 2, 1987 letter from Gu Weihao, an official in the Ministry of Aviation and China Aviation Industry Corporation, which discussed the possibility of inviting Chung’s wife, who is an artist, to visit an art institute so that Chung could use the cover of traveling with his wife as an excuse to travel to the PRC. This same letter suggested that passing information to the PRC through Chi Mak would be “faster and safer” and concluded with the statement: “It is your honor and China’s fortune that you are able to realize your wish of dedicating yourself to the service of your country.” The indictment describes a second letter from Gu Weihao, dated April 12, 1988, which asked Chung to provide information on “advanced technologies.” This letter stated that Rebecca Mak was in the PRC and she had reported that Chung and the Maks had a good relationship.

Each charge of economic espionage carries a maximum possible penalty of 15 years in prison and a $500,000 fine. The charges of acting as an agent of a foreign government without prior notification to the Attorney General and obstruction of justice each carry a maximum penalty of 10 years imprisonment and a $250,000 fine. The charges of conspiracy to commit economic espionage and making a false statement to federal investigators each carry a maximum possible penalty of five years imprisonment and a $250,000 fine.

In a separate case of espionage, Tai Shen Kuo , age 58, and Yu Xin Kang, age 33, both of New Orleans, Louisiana, and Gregg William Bergersen, age 51, of Alexandria, Virginia, were arrested on espionage charges related to the passage of classified government documents and information to the government of the People’s Republic of China (PRC).

Both Kuo and Kang were charged by criminal complaint with conspiracy to disclose national defense information to a foreign government. Bergersen was charged in a separate complaint with conspiracy to disclose national defense information to persons not entitled to receive it.

Bergersen and Kuo are scheduled to make their initial appearances in federal court in Alexandria. Kang will make her initial appearance in federal court in New Orleans.

The conspiracy charged in this case has all the elements of a classic espionage operation: a foreign government focused on accessing our military secrets; foreign operatives who effectively use stealth and guile to gain that access; and an American government official who is willing to betray both his oath of public office and the duty of loyalty we rightly demand from every American citizen.

“Such espionage networks pose a grave danger to our national security, and we should all thank the investigators and prosecutors on this case for effectively penetrating and dismantling this network before more sensitive information was compromised,” said Assistant Attorney General Wainstein.

US Attorney Rosenberg stated, “Those who compromise classified national security information betray the enormous responsibility and trust placed in them by our government and the American people.”

According to court documents, the criminal conduct spanned a two-year period from January 2006 to February 2008. Kuo, a naturalized US citizen and New Orleans businessman, gathered national defense information on behalf of the government of the PRC.

Working under the direction of an individual identified in the complaint affidavit only as “PRC Official A,” Kuo cultivated friendships with Bergersen and others within the US government and obtained from them—for ultimate passage to the PRC—sensitive government information, including classified national defense information. Much of the information pertained to US military sales to Taiwan.

Bergersen, a Weapons Systems Policy Analyst at the Arlington, Virginia-based Defense Security Cooperation Agency, an agency within the Department of Defense, was charged with being the source of the classified information collected by Kuo. Kang, a citizen of the PRC and a Lawful Permanent Resident of the United States, served as a conduit of information between PRC Official A and Kuo.

Meetings between Kuo and Bergersen took place at various locations in Northern Virginia, Charleston, South Carolina, and Las Vegas. On some occasions, Bergersen received undetermined cash payments from Kuo in exchange for information and documents he provided. Kuo and Kang each face up to life in prison if convicted of conspiracy to disclose national defense information to a foreign government.